Rodriguez v. Government Employees Ins. Co., 43602

Decision Date18 December 1981
Docket NumberNo. 43602,43602
Citation210 Neb. 195,313 N.W.2d 642
Parties, 21 A.L.R.4th 911 Louis RODRIGUEZ, Jr., Appellee, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellant.
CourtNebraska Supreme Court

Syllabus by the Court

1. Contracts: Insurance. Contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous, their terms are to be taken and understood in plain, ordinary, and popular sense.

2. Contracts: Insurance. Where the language is plain and unambiguous, the court will not read an ambiguity into the language in order to construe it against the one who prepared the contract.

3. Contracts: Insurance. Construction of a contract of insurance ought not to be employed to make a plain agreement ambiguous for the purpose of interpreting it in favor of the insured.

4. Contracts: Insurance: Motor Vehicles. An operable automobile which is being driven, albeit unlicensed, is an automobile owned by the insured under the automatic coverage provisions of the standard automobile liability insurance policy.

Kenneth H. Elson, Grand Island, for appellant.

Morgan & Morgan, Fullerton, for appellee.

Heard before KRIVOSHA, C. J., and BOSLAUGH, McCOWN, CLINTON, BRODKEY, and HASTINGS, JJ.

HASTINGS, Justice.

Louis Rodriguez, Jr., commenced this action by filing a petition for a declaratory judgment seeking a determination that a 1972 Fiat automobile which he was driving on August 22, 1976, when he was involved in an accident, was an "owned automobile" within the coverage provisions of either of two policies of insurance previously issued to him by the defendant, Government Employees Insurance Company. The defendant responded with a cross-petition seeking a ruling to the contrary. The District Court found generally for the plaintiff and entered judgment against the defendant insurance company, the effect of which was to determine that the Fiat automobile was within the coverage of these policies. Government Employees has appealed and we reverse.

Rodriguez had purchased the Fiat a few days prior to the accident and he had made no attempt to notify his insurance company of this fact until after the accident had occurred.

At the time of his purchase of the Fiat, plaintiff owned three other automobiles. Of these three cars only a 1969 Chrysler and a 1968 Chrysler had been declared by him to his insurance company and were named on his policies. He admitted that a third automobile owned by him, a 1969 Chrysler New Yorker, had never been insured under any policy issued by Government Employees. That latter automobile was operable and drivable and, according to plaintiff's own brief, was driven at most once a week, although it was never licensed in accordance with the laws of the State of Nebraska.

Each of the policies issued by defendant provided coverage for "owned automobiles." This term is defined by the policies to include: "(a) a private passenger ... automobile described in this policy for which a specific premium charge indicates that coverage is afforded ... (c) a private passenger ... automobile ownership of which is acquired by the named insured during the policy period, provided ... (2) the company insures all private passenger ... automobiles owned by the named insured on the date of such acquisition and the named insured notifies the company within 30 days after the date of such acquisition of his election to make this and no other policy issued by the company applicable to such automobile, or (d) a temporary substitute automobile ...."

The sole issue with respect to the terms of the policy is whether defendant insured "all automobiles owned by the named insured" on the date that plaintiff purchased the 1972 Fiat. We find that defendant did not, and therefore conclude that the 1972 Fiat was not an insured "owned automobile" within the terms of the policies at the time of the accident.

This court has held on numerous occasions that "contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous, their terms are to be taken and understood in plain, ordinary, and popular sense." Sampson v. State Farm Mut. Ins. Co., 205 Neb. 164, 167, 286 N.W.2d 746, 749 (1980). See, also, Dairyland Ins. Co. v. Esterling, 205 Neb. 750, 290 N.W.2d 209 (1980); Hammond v. Nebraska Nat. Gas Co., 209 Neb. 616, 309 N.W.2d 75 (1981).

It is equally well settled that "an insurance contract will be interpreted in accordance with the reasonable expectations of the insured at the time of the contract, and in case of doubt, the policy will be liberally construed in favor of the insured." Dairyland at 752-53, 290 N.W.2d at 211. " 'The language should be considered not in accordance with what the insurer intended it to mean but what a reasonable person in the position of the insured would have understood it to mean.' " Hammond at 624-25, 309 N.W.2d at 81. See, also, Wyatt v. Woodmen Acc. & Life Co., 194 Neb. 614, 234 N.W.2d 217 (1975).

Plaintiff would have the court apply these rules of construction to clause (c) (2) of the policies to reach a conclusion that "all automobiles owned by the named insured" does not include an unlicensed automobile owned by the insured. This we cannot do, for "(w)here the language is plain and unambiguous, the court will not read an ambiguity into the language in order to construe it against the one who prepared the contract." Sampson at 167, 286 N.W.2d at 749. Furthermore, "it is imperative that the contract made by the parties shall be respected and that a new contract is not interpolated by construction. Construction ought not to be employed to make a plain agreement ambiguous for the purpose of interpreting it in favor of the insured." Wyatt at 617-18, 234 N.W.2d at 220. The policies involved herein are plain and unambiguous and need no construction.

While this court has never been called upon to apply this particular "automatic coverage" clause in an automobile insurance policy, the matter has been...

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